Smartkarma Daily Briefs

Airbnb delivered a solid result and managed an all-around beat in the recent quarterwith over 115 million Nights and Experiences Booked, resulting in revenue of $2.5 billion, marking an 18% year-over-year growth.
Net income for the quarter stood at $650 million, reflecting a net income margin of 26%, the highest second-quarter margin ever achieved.
Additionally, free cash flow reached $900 million, a 13% increase from the previous year, with a trailing 12-month free cash flow of $3.9 billion and a margin of 43%.

Palantir Technologies Inc.: Why Their Commercial Business in the US is Soaring! – Major Drivers

Palantir Technologies maintained a GAAP operating income in Q2 and achieved GAAP profitability for the quarter.
In Q2, Palantir closed deals in the US commercial market in about 30 sectors, including pharmaceuticals, energy, consumer goods, utilities, health care, construction, automotive, transportation infrastructure, etc.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Akamai Technologies Inc.: The True Reasons Behind the Acquisition from StackPath! – Major Drivers

Akamai Technologies, Inc. delivered a positive result and managed an all-around beat last quarter.
Akamai is pursuing a completely different approach to cloud computing, making it fully distributed with many more points of presence than typical systems provide.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

BlackLine Inc.: Launch of AI-Enabled Intercompany Accounting Tool & Other Major Drivers

BlackLine, Inc. surpassed the revenue expectations as well as the earnings expectations of Wall Street.
BlackLine generated $145 million in total revenue in the quarter and $31 million in non-GAAP net profitability.
BlackLine also completed its largest middle market transaction ever, driven by the demand for cutting-edge solutions to challenging intracompany workflows.

Lyft Inc.: How Women+ Connect is Changing the Game in Passenger Safety! – Major Drivers

Lyft, Inc. delivered significant results in the quarter.
Revenue increased by 3% year over year to $1.021 billion.
In July, Lyft saw sustained robust supply trends, with 25% more drivers using Lyft than the previous year and driver hours increasing by nearly 45% year over year.

Monster Beverage Corporation: Can The Bang Energy Acquisition Become A Growth Driver? – Major Drivers

Monster Beverage Corporation generated below par revenues in the last quarter and its earnings were on par with market expectations.
The rise in gross profit as a percentage of net sales was primarily due to price actions, lower freighting expenses, and higher aluminum can costs.
Besides that, the company introduced The Beast Unleashed in the quarter.

Viatris Inc.: Unveiling the Power of Popular Brands like Lipitor and Lyrica! – Major Drivers

Viatris Inc. delivered mixed results for the previous quarter, with revenues above the analyst consensus.
The company exceeded its expectations in the quarter, delivering total revenues of $3.9 billion, or about 2% year-over-year growth on an operational adjusted basis, as well as adjusted EBITDA of $1.3 billion and free cash flow of $447 million.
Tyrvaya’s bridge program was improved during the quarter to boost value per script and produce the greatest quarterly TRx launch.

EOG Resources Inc.: Why They’re Bullish on Natural Gas’s Long-Term Prospects! – Major Drivers

EOG Resources, Inc. managed to surpass the revenue and earnings expectations of Wall Street.
This quarter, they emphasized improved drilling performance in the South Powder River Basin, Mowry, and Ohio Utica Combo plays.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

IRDM: Highlights from Investor Day

By Hamed Khorsand

The theme of this year’s investor day at Iridium Communications (IRDM) was 2030 and what the Company was looking to achieve between now and then
IRDM did not announce any new products. The event was about IRDM’s ability to generate free cash flow that would be used to repurchase shares and increase the cash dividend
We, like many others, were looking to hear more about IRDM’s relationship with Qualcomm (QCOM), which was not the case. We are expecting an update from QCOM in January 2024

The Kroger Co.: Will The Partnership With Performance Kitchen Catalyze Revenues? – Major Drivers

The Kroger Co. delivered a mixed result in the recent quarter, with revenues below market expectations but surpassing the analyst consensus regarding earnings.
The total effect on operating profit during the second quarter was somewhat positive, and they expect this to continue for the remainder of the year.
Besides these results, their healthcare subsidiary, Kroger Health, entered into a collaborative partnership with Performance Kitchen to provide medically customized meals (MTMs).

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Sep 26

Daily Brief Indonesia: Indika Energy and more

By Smartkarma Daily Briefs | Daily Briefs, Indonesia

In today’s briefing:

Morning Views Asia: Indika Energy, Tata Steel Thailand

Morning Views Asia: Indika Energy, Tata Steel Thailand

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

Indika Energy
Tata Steel Thailand

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Sep 26

Daily Brief India: JSW Infrastructure, Ajanta Pharma, HDFC Bank, Indika Energy, IREDA and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

JSW Infrastructure Ltd IPO- Forensic Analysis
Ajanta Pharma (AJP IN): Starts FY24 With Healthy Branded Generics Growth and Improving Margins
[Week 4] Namaste India | HDFC Bank (HDFCB IN) | Asset Quality Concerns, but Why Now?
Morning Views Asia: Indika Energy, Tata Steel Thailand
Indian Renewable Energy Development Authority Pre-IPO Tearsheet

JSW Infrastructure Ltd IPO- Forensic Analysis

By Nitin Mangal

JSW Infrastructure (5978490Z IN) will open up for its IPO subscription this week.
The company is into ports and maritime infrastructure and is the second largest commercial port operator in India in terms of cargo handling capacity.
While the company has grown rapidly, the financials do indicate few concerns such as critical dependence/high RPT with JSW group, high debt-high cash balance sheet, forex risk, etc.

Ajanta Pharma (AJP IN): Starts FY24 With Healthy Branded Generics Growth and Improving Margins

By Tina Banerjee

Ajanta Pharma (AJP IN) reported better-than-expected profitability in Q1FY24, due to softening of raw material prices and normalization of freight rates. EBITDA margin expanded 300bps YoY to 26%.
Revenue increased 7% YoY to INR10B, driven by superior execution in branded generics business and lesser price erosion in the U.S. 73% of the total sales came from branded generic.
Management maintained mid-teen revenue growth and EBITDA margin guidance of ~25% for FY24. Ajanta Pharma has a positive business outlook due to growing branded generic business and niche U.S. launches.

[Week 4] Namaste India | HDFC Bank (HDFCB IN) | Asset Quality Concerns, but Why Now?

By Pranav Bhavsar

The markets closed below our stop of 19,900, primarily driven by weakness in global market sentiments.
For HDFC Bank (HDFCB IN) while the street seems to be worried about asset quality, trends in whistle-blower complaints and the timing of the merger also raise alarms.
Other names discussed this week include Delta Corp Ltd (DELTA IN) and Godrej Properties (GPL IN).

Morning Views Asia: Indika Energy, Tata Steel Thailand

By Charles Macgregor

Indika Energy
Tata Steel Thailand

Indian Renewable Energy Development Authority Pre-IPO Tearsheet

By Ethan Aw

IREDA (1845911D IN) is looking to raise at least US$100m in its upcoming India IPO. The deal will be run by IDBI Capital, SBI Capital and Bob Capital.
Indian Renewable Energy Development Authority (IREDA) is a wholly owned Government of India (GoI) enterprise under the administrative control of the Ministry of New and Renewable Energy (MNRE).
It is registered with the Reserve Bank of India (RBI) as a Systemically Important Non-Deposit-taking Non-Banking Finance Company (NBFCND-SI), with Infrastructure Finance Company (IFC) status.

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Sep 26

Daily Brief China: Tuhu Car, Zhejiang Leapmotor Technologie, Trip.com, Bank of Jiangsu , Beijing Yuanxin Technology Group Co Ltd and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

Tuhu Car IPO Trading – Lukewarm Subscription, Small Float Could Impact Trading
Leapmotor IPO Lock-Up – US$3.3bn Lockup Expiry, Everyone in the Money, CCASS Movement to Boot
Monthly Chinese Tourism Tracker | ‘Pent-Up’ Travel Demand — Does China Have Any? | (September 2023)
Bank of Jiangsu – Fees -33%, Gains +64% Credit Costs -19%, Does Not Suggest Quality Earnings
Pre-IPO Beijing Yuanxin Technology Group – Some Points Worth the Attention

Tuhu Car IPO Trading – Lukewarm Subscription, Small Float Could Impact Trading

By Clarence Chu

Tuhu Car (2007986D HK) raised around US$151m in its Hong Kong IPO.
Tuhu is an integrated online and offline platform for automotive services in China.
We have covered various aspects of the deal in our previous notes. In this note, we will talk about the demand and trading dynamics.

Leapmotor IPO Lock-Up – US$3.3bn Lockup Expiry, Everyone in the Money, CCASS Movement to Boot

By Sumeet Singh

Leapmotor (9863 HK) (LM) raised around US$800m in its Hong Kong IPO. The stock was listed in Sep 2022, its lockup on pre-IPO investors will expire on 29th Sep 2023.
LM is a smart EV company based in China, founded in 2015.
In this note, we will talk about the lock-up dynamics and updates since our last note.

Monthly Chinese Tourism Tracker | ‘Pent-Up’ Travel Demand — Does China Have Any? | (September 2023)

By Daniel Hellberg

August outbound travel activity surged against easy 2022 comps, but offered no surprises
The pace of outbound capacity rebuild slowed in August — what do airlines see ahead?
Is there really “pent-up” tourism demand among Chinese consumers? We don’t think so

Bank of Jiangsu – Fees -33%, Gains +64% Credit Costs -19%, Does Not Suggest Quality Earnings

By Daniel Tabbush

Fee income is down 33% in the most recent quarter which may have prompted the bank to realize gains up 63% in the period to preserve profit growth
Quality of earnings is not strong, with more than half of the bank’s pre-tax income delta driven by realized and unrealized gains, with credit cost decline the other key driver
Loss NPLs are now 26% of total NPLs, from 11% a few year ago, suggesting worsening credit metrics. Declining credit costs seem at odds with economy, NPL distribution.

Pre-IPO Beijing Yuanxin Technology Group – Some Points Worth the Attention

By Xinyao (Criss) Wang

Yuanxin’s financial performance has not improved and it is still in a state of continuous loss. At such low gross margin level, Yuanxin will find it difficult to make money.
As China’s retail pharmacy market has entered a new era of integration as the industry growth is slowing down, the challenges Yuanxin has to face would be different from before.
When the market pattern has been basically determined, Yuanxin has little chance to break through. Being acquired may be a better outcome. If IPO, valuation would be lower than peers.

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Sep 26

Daily Brief Japan: Kokusai Electric , Toyo Construction, Tsuruha Holdings, Kosaido and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Kokusai Electric Pre-IPO – The Positives – Well Established with High Market Share
Kokusai Electric (6525 JP) IPO – Index Demand On The Follow
YFO Reloads Toyo Construction Takeover Proposal at ¥1255/Share
Activists May Be Pushing Tsuruha Towards a Merger with Welcia
Kokusai Electric Pre-IPO – The Negatives – Can’t Avoid the Cycles
KOSAIDO Holdings (7868) – Wide Economic Moat Providing a Major Competitive Advantage

Kokusai Electric Pre-IPO – The Positives – Well Established with High Market Share

By Sumeet Singh

KKR is looking to raise around US$750m via selling a stake in Kokusai Electric (6525 JP) (KE) in its Japan IPO.
KE main business activities consist of the manufacturing, sales and maintenance service of semiconductor manufacturing equipment.
In this note, we talk about the positive aspects of the deal.

Kokusai Electric (6525 JP) IPO – Index Demand On The Follow

Niche Japanese Semiconductor Production Equipment specialist Kokusai Electric (6525 JP) last Thursday announced the TSE approved its late October IPO (with indicative pricing, shares to be sold, and initial prospectus).
This insight looks at initial shareholder structure, selling group, post-IPO shareholder structure with index inclusion timing, and follow-on flow possibilities.
At ¥435bn indicative market cap, it will be the largest IPO in Japan since pre-covid, despite coming in a cycle trough. I expect it will be hot.

YFO Reloads Toyo Construction Takeover Proposal at ¥1255/Share

Last night Reuters teased a headline saying the Nintendo Family Office called YFO (and related entities) would raise its proposed takeover price for Toyo Construction to ¥1255/share.
Recently, the company had agreed to start an investigation and YFO had dropped its demands for an EGM. In Q1, the company reporetd Revenues +18.6%yoy, reasonably in-line with original guidance.
This new price comes at a 1% premium to previous close, and is meant to start discussions. The Board has indicated it will start deliberations tomorrow.

Activists May Be Pushing Tsuruha Towards a Merger with Welcia

By Michael Causton

Tsuruha is the latest retailer to come under attack from an activist investment fund.
As with Seven & I, the company fended off demands to shake up its board, crucially with the support of Aeon, its largest stakeholder.
The move will likely lead to some careful reconsideration of how Tsuruha and Aeon could work together and may even lead to a Welcia/Tsuruha merger.

Kokusai Electric Pre-IPO – The Negatives – Can’t Avoid the Cycles

By Sumeet Singh

KKR is looking to raise around US$750m via selling a stake in Kokusai Electric (6525 JP) (KE) in its Japan IPO.
KE main business activities consist of the manufacturing, sales and maintenance service of semiconductor manufacturing equipment.
In this note, we talk about the not-so-positive aspects of the deal.

KOSAIDO Holdings (7868) – Wide Economic Moat Providing a Major Competitive Advantage

By Astris Advisory Japan

Robust barriers to entry and generating attractive returns – KOSAIDO Holdings is the market-leading funeral services operator in the Tokyo metropolitan area, with a 70% market share in cremations.
The company’s robust economic moat is derived from its dominant market position as the primary operator of crematorium services in central Tokyo.
The low likelihood of new entrants due to stringent legal and political barriers further solidifies its competitive advantage.

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Sep 25

Daily Brief Quantitative Analysis: Northbound Flows (Sep 22nd): BYD and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

Northbound Flows (Sep 22nd): BYD, CATL, Zijin Mining, Mindray
Hong Kong Connect Flows (Sep 22nd): China Mobile, ICBC, Innovent Biologics
A-H Premium Weekly (Sep 22nd): Wuapptec Co Ltd, Fuyao Glass Industry, Tianqi Lithium Corporation
EQD | HSI WEEKLY Bounce Will Face These Resistance Levels
EQD | VIX Index WEEKLY: Has Volatility Already Peaked?
HK Short Interest Weekly: Innovent Bio, Trip.Com, Nio, Baba, Zto Express, HSBC

Northbound Flows (Sep 22nd): BYD, CATL, Zijin Mining, Mindray

We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of September 22nd.
We estimate the weekly inflows to be US$47.4 million, led by consumer discretionary, information technology, financials sectors, and offset by materials, health care.
We highlight flows for BYD, CATL, Zijin Mining and Mindray.

Hong Kong Connect Flows (Sep 22nd): China Mobile, ICBC, Innovent Biologics

We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of September 22nd.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for China Mobile, ICBC and Innovent Biologics.

A-H Premium Weekly (Sep 22nd): Wuapptec Co Ltd, Fuyao Glass Industry, Tianqi Lithium Corporation

We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 115.7% as of Sep 22nd.
The average A-H premium changed by -1.1ppt week on week, led by energy, industrials, communication services and offset by consumer discretionary.
We highlight weekly changes in A-H premium for Wuapptec Co Ltd, Fuyao Glass Industry, Tianqi Lithium Corporation.

EQD | HSI WEEKLY Bounce Will Face These Resistance Levels

By Nico Rosti

The Hang Seng Index is approaching WEEKLY OVERSOLD territory, but it is in a clear downtrend, so when it bounces it could be a good occasion to go SHORT.
The trade can be placed between this week and the next 2 weeks, with this week and the next being the most probable time for the reversal to happen.
Based on MRM WEEKLY model readings, the target price area where to enter the SHORT trade is 18553-19494.

EQD | VIX Index WEEKLY: Has Volatility Already Peaked?

By Nico Rosti

The VIX INDEX last week reversed up and briefly touched 17, it’s OVERBOUGHT according to MRM WEEKLY SHORT model.
VIX Index could pull back a bit this week, then go up again, but not much higher than 18. Volatility should end this coming week, or early the following week.
WEEKLY and MONTHLY OVERSOLD MRM reading on global markets suggest an imminent bounce, possibly a lasting MONTHLY bounce – unless all of a sudden the market enters a Bear Market.

HK Short Interest Weekly: Innovent Bio, Trip.Com, Nio, Baba, Zto Express, HSBC

We analyzed the latest HK SFC report for aggregate short position as of Sep 15th.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short changes in Innovent Bio, Trip.Com, Nio, Baba, Zto Express, HSBC.

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Sep 25

Daily Brief ESG: Ways Should Be Explored to Make Companies More Effective in Disclosing Their Cost of Capital and more

By Smartkarma Daily Briefs | Daily Briefs, ESG

In today’s briefing:

Ways Should Be Explored to Make Companies More Effective in Disclosing Their Cost of Capital

Ways Should Be Explored to Make Companies More Effective in Disclosing Their Cost of Capital

By Aki Matsumoto

Recognizing the cost of capital and return on capital is an important factor in determining business strategy, but not many companies disclose their cost of capital and specific management vision.
In order to increase the effectiveness of disclosure of the cost of capital, we should consider changing the Corporate Governance Code to require disclosure by prime market listed companies.
JPX Prime 150 Index, which is based on “equity spreads,” has begun to be calculated, but it has’t attracted much attention since its performance doesn’t differ from that of TOPIX.

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Sep 25

Daily Brief Event-Driven: The Biggish Sep 2023 “Wednesday-Thursday Trade” With Added Monday/Friday Flavour and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

The Biggish Sep 2023 “Wednesday-Thursday Trade” With Added Monday/Friday Flavour
Thai Beverage (THBEV SP): Cheaper than Peers with an Upcoming Catalyst
Quiddity HK Connect SOUTHBOUND Flows (Week to 22Sep23) : China Mobile, Meituan, Xpeng, Banks!
Merger Arb Mondays (25 Sep) – ENM, Poly Culture, Eoflow, Origin Energy, Symbio, Costa, InvoCare
Quiddity A/H Premium Weekly (To 22Sep23): Financials & Communications Dominate Flows
Golden Agri-Resources (GGR SP): Could Outperform Peers
Quiddity Mainland Connect NORTHBOUND Flows (Week to 22Sep23) : BYD, Midea, Bk of Jiangsu, & Amperex

The Biggish Sep 2023 “Wednesday-Thursday Trade” With Added Monday/Friday Flavour

Every year it’s the same trade. This year it is Wednesday and Thursday. There are risks to the analysis – notably allocation.
But there may be ¥800bn+ to buy on one day into the close later this month (+ another ¥200-300bn on two other days). Then a ¥500bn sell two days later.
Over the past ten years, the two day return on the March trade is great. In Sep, not so much. This year there are Extra Special Flows.

Thai Beverage (THBEV SP): Cheaper than Peers with an Upcoming Catalyst

By Brian Freitas

Thai Beverage (THBEV SP) has trended lower over the last couple of years and the stock is trading very close to its lows.
There has been a contraction in multiples and Thai Beverage (THBEV SP) trades cheaper than a lot of its Asia listed peers.
A potential index inclusion could bring in significant passive inflows and result in a rerating of the stock.

Quiddity HK Connect SOUTHBOUND Flows (Week to 22Sep23) : China Mobile, Meituan, Xpeng, Banks!

This is the brand spanking new Quiddity HK Connect SOUTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and Mainland Connect NORTHBOUND Monitor.
The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
We like the nifty interactive tables and charts and welcome feedback. This week saw HKD 14.5bn+ of net buying. That makes ten weeks of net inflows.

Merger Arb Mondays (25 Sep) – ENM, Poly Culture, Eoflow, Origin Energy, Symbio, Costa, InvoCare

By Arun George

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – 111 Inc (YI US), Eoflow (294090 KS), Symbio Holdings (SYM AU), Mason Group Holdings (273 HK), JSR Corp (4185 JP), DDH1 (DDH AU), ENM Holdings (128 HK).
Lowest spreads – Toyo Construction (1890 JP), Healius (HLS AU), Yaizu Suisankagaku Industry (2812 JP), Allkem Ltd (AKE AU), Pact Group Holdings (PGH AU), Pacific Current (PAC AU).

Quiddity A/H Premium Weekly (To 22Sep23): Financials & Communications Dominate Flows

The Brand-Spanking New (7 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning in pairs over time, etc.
We used to do it and brought it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 47 Trade Recommendations.
The last 6 weeks (since the start of the new Monitor and Portfolio 7 weeks ago) have seen net portfolio performance of +0.50%, +1.35%, +0.14%, +0.47%, +0.15%, +0.12%.

Golden Agri-Resources (GGR SP): Could Outperform Peers

By Brian Freitas

Golden Agri Resources (GGR SP) has traded lower over the last year and trades cheaper than some of its peers.
Revenue, income and net profit margins have been moving higher over the last few years and EPS/DPS have increased sharply over the last two years.
Potential passive buying could result in Golden Agri Resources (GGR SP) outperforming peers in the near term.

Quiddity Mainland Connect NORTHBOUND Flows (Week to 22Sep23) : BYD, Midea, Bk of Jiangsu, & Amperex